The Economic Growth and Tax Relief Reconciliation Act was designed to give tax breaks to business owners and the upper class in an effort to stimulate the market. Although some experts argue that the act initially helped the economy, many note that it had negative effects by reducing government revenues.
The Economic Growth and Tax Relief Reconciliation Act (EGTRRA), signed into law on June 7, 2001, by George W.
The estate tax is to be phased out under the provisions of the tax cuts. Before the passage of the act, an estate worth less than $675,000 was exempt from estate taxes, while significantly larger estates could pay taxes at rates of over 50 percent. The act slowly increased the exemption amount for estates and decreased the tax rate over a number of years. By 2009, all estates worth less than $3.5 million were to be exempt from paying estate taxes, and the maximum amount of tax that larger estates will have to pay is not to exceed 45 percent.
EGTRRA was also designed to reduce
The two major components of EGTRRA, the elimination of the estate tax and a reduction in income tax rates, strongly favored those in the highest income brackets. The 2001 tax cuts were a short-term fix that was designed to generate economic growth, but as of 2008, this plan had not safeguarded the economy from decline. Additionally, in 2010, the tax cuts are due to expire, and in the absence of further action by Congress, the tax rates are to return to pre-2001 levels.
Corporate income tax
Personal income tax
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